South Africa’s agriculture gross value-added expanded by 18.5 % q/q on a seasonally adjusted and annualised basis in the third quarter of 2020, much stronger than we anticipated. This follows an expansion of 19.6 % q/q in the second quarter and 35.9% q/q in the first quarter (both figures revised up).
The government is drafting a localisation strategy as part of measures underpinning its economic reconstruction and recovery plan. The agriculture, food & beverages sector has accounted for about 8% of SA’s annual imports over the past five years, an average value of $6.5bn. This makes it a worthwhile sector to be explored in promoting localisation.
African governments should have a fresh look at agriculture as part of the economic recovery plan after Covid-19
African governments should have a fresh look at agriculture, embracing technology (information technology, mechanical and biotechnology) and also private-sector partnerships. There also needs to be confidence in the citizenry to manage their land parcels. This will involve the granting of title deeds or tradable long-term leases in various African countries. In the case of better seeds, the evidence from South Africa is there for many countries to observe and learn.
Following a notable recovery to 51 points in the third quarter of 2020, the Agbiz/IDC Agribusiness Confidence Index (ACI) rallied in the fourth quarter to 61, which is its highest level since the third quarter of 2014. A level above the neutral 50-point mark implies that agribusinesses are optimistic about business conditions in South Africa.